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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.


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Mortgage Debentures - 1/3 of Co's loan books more than 30% cent of borrowers overdue.

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Overdue loans at mortgage debenture companies are under scrutiny

THE fragile nature of Australia's mortgage debenture sector has been revealed, with almost a third of companies running loan books where more than 30 per cent of borrowers are overdue.
At its most extreme, more than 70 per cent of all loans by value were more than 30 days in arrears at one Victorian company.
The companies sell debentures - financial instruments which provide a fixed rate of return - to investors and lend the money out.
The health of the sector, as well as how comprehensively investors understand the risks, has come under renewed scrutiny following the downfall of its largest player, the Banksia Financial Group.
Banksia, a regional lender, was recently placed in receivership owing investors $660 million.  A study by BusinessDaily found that only five of the 18 unlisted and unrated companies selling mortgage debentures complied with capital requirements suggested, but not mandated, by the Australian Securities and Investments Commission.

Of those companies - which hold close to $1.4 billion in investor funds - more than half have overdue loan rates running above 10 per cent. Five companies have loan books where more than one in three loans are in arrears while 71 per cent of Balanced Securities Limited's $146.4 million loan book was overdue.  The figures were obtained from each company's most recently published prospectus and overdue loans include any more than 30 days in arrears and are measured as a percentage of the book's value.  ASIC has launched a taskforce to review the sector in the wake of the Banksia collapse.

It is expected to look into whether capital requirements to protect against bad loans should be made mandatory. The corporate watchdog recommends unlisted and unrated debenture issuers have $8 for every $100 in loans provided. If more than 10 per cent of the company's loan book is held by property developers the ratio rises to $20. Banksia had less than $3.60 for every $100 of loans and only five of the remaining companies meet the suggested ratios. Some are significantly below ASIC's guidelines including Wickham Securities, which has $2.67 for every $100 in loans despite property development comprising 82 per cent of its lending. 

Wealth Within analyst Dale Gillham said investors consistently fail to appreciate the risks associated with companies like Banksia.  "Investors don't educate themselves," he said.  "From my experience 90 per cent of people don't read the prospectus. "People look at the return rather than the product.  " In that way they can be their own worst enemies.  "You can have disclosure but people need to read it."


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  • doyla66
    doyla66 Tuesday, 06 November 2012

    Unfortunately, when honest people are looking to put their money in these 'schemes', the advisors selling them are dishonest, and will tell them anything just to get them to 'invest', just so the advisors can collect their big fat commissions! My in-laws nearly lost all their lives savings when Bridgecorp collapsed. By pure luck they pulled out their money only 3 weeks before the collapse.
    The Bridgecorp advisor constantly assured my in-laws that their money was a "safe investment" and that "they couldn't lose anything" & "nothing can happen to your money as it's secured" $ other lies to that effect. Bridgecorp directors ended up in JAIL.

  • doyla66
    doyla66 Tuesday, 06 November 2012

    If ASIC had valued Denise Brailey's superior research and knowledge and efforts to get their heads on the page this situation could have been averted.
    If ASIC Chairman Lucy and others had been able to something more useful than patronise Denise Brailey and redecorate his office we would not be in this situation. ASIC should have had a Commissioner for Consumer Complaints with some intelligence on the board of ASIC, at the very least. The result is billions "lost" (hidden), up to a million Australians with their financial situations wrecked. Are the government waiting for this to reach a tipping point e.g. over a million investors hurt, over a thousand borrowers at serious risk (hello...June 2012 1500 repossessions), what other statistics of casualties and other forms of "collateral damage" are Australians supposed to tolerate?

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Guest Monday, 30 November 2020